Grayscale’s ETF Aspirations Get a Boost as SEC Abandons Appeal – Bitcoin Price to the Moon?
The Bitcoin (BTC) price briefly vaulted back above $27,000 on Friday in wake of reports that the US Securities and Exchange Commission (SEC) won’t appeal against a recent court ruling that reversed its decision to prevent crypto asset manager Grayscale from converting its Bitcoin trust into an Exchange Traded Fund (ETF).
As per a Reuters report, the SEC had until midnight on Friday to appeal against the legal loss but decided not to.
Back in August, the D.C. Circuit Court of Appeals ruled that the SEC’s rejection of Grayscales ETF application must be reviewed, labelling it as “arbitrary and capricious”.
The SEC could still opt to reject Grayscale’s ETF application for different reasons than those reversed by the court.
But the decision not to appeal suggests the agency’s resolve to block the passage of Grayscale’s and potentially other companies’ spot Bitcoin ETF applications is waning.
That’s in fitting with a growing narrative in the Bitcoin markets that by early 2024, the SEC will have green lit a number of spot Bitcoin ETFs, with Wall Street behemoths like BlackRock, Fidelity and Vanguard all filing their own applications back in June.
Since early 2021, shares of Grayscale’s Bitcoin trust, the largest such crypto product in the world, have been trading at a discount to its actual Bitcoin holdings.
A conversion to an ETF would eliminate this discount by allowing for the creation of a issuance/redemption model, with new shares issued in times of rising demand and then redeemed in times of falling demand to keep the price steady and level with Bitcoin.
Anticipation that Grayscale’s Bitcoin trust may soon be converted to an ETF means that this discount has narrowed sharply in recent months, however.
The discount was last around
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